Putting Her First: Two Startups' Approach To Serving The Underserved

Most startups are known for creating new or better solutions to an existing problem, or for introducing innovation and efficiency to a stodgy industry. Less common are other startups, such as digital investment platform Ellevest and personal styling company Dia&Co, that also aim to create solutions for a particular group of people – in this case, women – who have limited options. While both companies differ greatly in terms of their products, they’ve found success in the same seemingly simple approach – focusing on the customer.

But that success wasn’t built without the challenges of identifying and building a platform that works for an underserved market.

TrueBridge Capital Partners

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Launched in 2016 by CEO Sallie Krawcheck, Ellevest bills itself as “redefining investing for women,” based on the idea that typical investment platforms today are less relevant for women than they are for men. At the earliest stages of the company’s formation, however, even Krawcheck – who was previously head of global wealth management at Bank of America and CFO of Citigroup – faced doubts about Ellevest’s purpose and the core market it aimed to serve.

According to Krawcheck, many women were offended by the idea of a woman-focused investment platform, seeing it as unnecessary and even sexist.

“I’d been in business for a long time and never had a reaction like that before. Not one single woman thought we were doing something helpful and smart,” Krawcheck said in a recent interview with TrueBridge Capital. “Now we see women thanking us for doing this, for co-creating a platform with them.”

Dia&Co, co-founded in 2014 by CEO Nadia Boujarwah and Lydia Gilbert, faced its own set of challenges by targeting a primary customer (plus-size women) whom the traditional fashion industry has essentially ignored – this despite the fact that 67% of women in the United States wear a size 14 or above, Boujarwah said in an interview with TrueBridge.

“As we began to investigate this massive gap, we often heard that retailers did not carry or produce clothing in larger sizes because they believed women above size 14 were not interested in fashion,” Boujarwah said. “I knew from my personal experience that this wasn’t true for me, and I firmly believed that millions of other women wanted to participate in fashion as well, but were not being given the opportunity due to their size. The more women we spoke to, the more we knew this to be true.”

Today, both Ellevest and Dia&Co have successfully met – and moved beyond – the challenges that come with shifting paradigms within their respective industries. For both companies, the key has been approaching those challenges and developing solutions completely with the customer in mind.

As Krawcheck explains, Ellevest’s goal is not to make an investment platform that is easier for women because they are unable to understand existing solutions. Instead, Ellevest is serving a customer who has specific wants and needs for money management that aren’t met by existing platforms, because these platforms weren’t designed to reflect the realities of her life.

According to Ellevest, those realities start with the persistent gender pay gap, which leaves professional women with salaries that peak and stagnate an average of 15 years earlier than men. As a result, women are also left with less money at retirement age – which is especially problematic because women typically live 3-5 years longer than men.

Ellevest approaches these unique issues through a goal-oriented platform, which allows customers to tailor Ellevest’s products to meet their specific needs, whether it’s retiring well, buying a home, or building a business. Primarily through referrals and word-of-mouth, Ellevest has quickly become one of the fastest-growing financial advisors, as well as introduced new capabilities to serve its community’s needs, including 401(k) rollover and private wealth management services.

“Most assumptions about women in investing are wrong. Women are not risk averse, but risk aware – women just want to understand ‘How far short of my goal can I fall?’” Krawcheck said. “[Ellevest] frees our customer to make decisions that are important to her, because to her, tracking to a goal matters more than tracking to the S&P.”

Despite the differences in their offerings, Dia&Co is similar to Ellevest in that it’s hyper-focused on meeting its customers’ needs through personalization.

As Harvard Business School classmates, Boujarwah and Gilbert saw that even though plus-size clothing is in significant demand in the U.S., it only accounts for 17% of total apparel purchased. But beyond that, they recognized that the cause for the gap was a failure on the supply side to address what its customers want – a positive shopping experience with exceptional customer service that leaves them feeling engaged and inspired.

As Boujarwah points out, it’s unfortunately very common for women of all sizes to have negative shopping experiences in stores. A Dia&Co survey found that only 22% of women reported feeling happy after leaving a fitting room, and 33% reported feeling significantly worse leaving than when they entered. Those issues are only compounded for plus-size women, whose clothing options in stores – if there are any – are often severely understocked and located far from the main sales floor.

Dia&Co’s goal is to transform retail by making it personal and inclusive, including offering one-on-one interactions with stylists and providing clothing and styling advice that is tailored to each woman’s tastes, body, and budget. Much of that is achieved through Dia&Co’s try-at-home subscription model.

“When we founded Dia&Co, our singular objective was to serve this customer exceptionally. This has required completely reimagining the category for her, and an important part of the puzzle was the shopping experience itself,” Boujarwah said. “Facilitating an in-home shopping model has proven to be a valuable place to start. Since launching this service, feedback has been incredibly positive, and we’ve now worked with more than a million women.”

Long term, Dia&Co aims to continue democratizing fashion by partnering with more players across the industry – such as fashion schools, existing brands, and the media – while Ellevest continues to expand its capabilities to keep up with the growing demands of its community.

But as both Krawcheck and Boujarwah emphasize, the most important part of their future strategies will remain the customer – and both companies will continue to lead their industries by example by putting “her” first.